managing risk using a portfolio perspective

Barolo company manufactures laptop stickers for italian sports teams. Barolo's risk management team has identified five inherent risk and plans to manage them using a typical ERM portfolio perspective (i.e align the portfolio of residual risks with the company's risk apetite).specially the team has decided to accept inherent risk2 (IR2) and internal risk 3(IR3), as they approximately offset each other. the team also decided accept inherent risk 1 (IR1because it is very close to the company's risk apetite) . in addition the team decided to reduce inherent risk4.Barolo's risk graph shows below depicts its portfolio of risks after the team has implemented its risk responses.